Book $120,000 of sales in a month on a plan that pays 5% up to a $100,000 target and 8% above it, and your commission is $6,600. Add $2,000 of base pay and you’re at $8,600 for the month.
How does tiered commission work?
The calculator splits your sales at the target. Sales up to it earn the first rate, and only the sales above it earn the second. Base pay goes on top, and that total is your pay before deductions. On a flat plan, put the same rate in both boxes. The last line estimates what you keep, using your province and a full year of equal periods.
This fits most sales jobs that pay a bonus rate for beating a goal. But if your plan pays the higher rate on all sales once you pass the target, the tool won’t match it, since it applies the second rate only to the extra sales. Work out the two parts by hand in that case.
What numbers start in the calculator?
| Item | Default value |
|---|---|
| Sales in the period | $120,000 |
| Commission up to target | 5% of the first $100,000 |
| Commission above target | 8% of the extra sales |
| Base pay | $2,000 a period |
| Periods in a year | 12 (monthly), 4 for quarterly |
What does a strong month pay in Ontario?
With the defaults, the first $100,000 of sales earns $5,000 and the extra $20,000 earns $1,600. Commission is $6,600, which is 5.50% of sales. Total pay before deductions is $8,600.00.
After deductions you’d take home about $6,366.56 a month, assuming every month brings the same $8,600, which adds up to $103,200 a year.
A slower month looks different. Sales of $80,000 stay under the target, so commission is $4,000 at 5.00%. With base pay the total is $6,000, and about $4,591.59 is left after deductions. Repeat the strong month in Alberta and about $6,390.21 stays with you.
Is a tiered plan better than a flat rate?
A higher second rate pays off in big months, but a low base makes the slow ones harder. Try the same sales with a flat 5% and no base pay. The total is $6,000, which is $2,600 less than the tiered plan. If you’re paid by the hour instead, the hourly to salary calculator gives you a comparison. For a whole year at a steady level of pay, use the take-home pay calculator.
What does the tool leave out?
- Match the periods. Quarterly sales need four periods, not twelve.
- Commission isn’t always paid in the month of the sale, and chargebacks and delays aren’t modelled.
- The after-deduction line assumes equal pay all year, so a very large month may be taxed differently on the pay date.
- Draws against future commission, common in some plans, aren’t part of the tool.
- Expenses you pay yourself aren’t deducted here.
A large one-off commission cheque behaves like a bonus, so run it through the bonus tax calculator as well.
Where the numbers come from
Commission is plain arithmetic on the rates you enter. The deduction estimate uses 2026 tax brackets and contribution limits from the published federal and provincial data, rechecked on 29 September 2026. This website has no connection with any government body.
Frequently asked questions
How do I calculate tiered commission?
Sales up to the target earn the first rate. Only the sales above the target earn the second rate.
What commission do $120,000 of sales earn?
At 5% up to $100,000 and 8% above it, you get $6,600, or 5.50% of sales.
How do I set a flat commission?
Put the same percentage in both rate boxes and the target stops changing the result.
What do I keep from $8,600 a month in Ontario?
About $6,366.56 a month, if every month of the year pays the same.
What do I enter for quarterly pay?
Set periods in a year to 4 and type sales and base pay for one quarter.
Sources and updates
Updated: . How we check rates · Editorial team · Updates
Estimate only. These figures are a planning estimate, not tax, legal or accounting advice. Tax-Services.ca is an independent publisher: we don't prepare or file tax returns, and we don't offer tax, legal or accounting services. We have no connection with the Canada Revenue Agency, Revenu Québec or any provincial government. Your real amounts depend on details this tool cannot see, so confirm them with an official source or a qualified professional before you act.